Bruno Waterfield has been the Brussels correspondent for the Telegraph since 2007. He has been reporting on politics and European affairs for over 13 years, first from Westminster and then from Brussels since January 2003.

It's not over, the eurozone's slow strangulation goes on

Investment: the EU needs it and isn't getting it (source European Commission)

The false hopes born of a momentary pause in the eurozone crisis have not flowered in the EU's latest economic forecasts.

The European Commission had been hoping to announce that the corner was turned.

But the hopes that 2013 might show stronger than expected growth with an upwards revision to European wealth creation next year did not come to pass.

The eurozone did not do better than expected, with the forecast of a continued economic contraction in 2013, shrinking by an 0.4 per cent.

The reality of slow economic strangulation in the EU single currency area has tempered next year’s growth prediction down to 1.1 per cent, significantly more anemic than the 1.4 per cent estimated at the start of the year.

Investment (fixed capital formation) is one key indicator to watch and even the rosy spectacled commission's search for an upturn is severely qualified.

"Overall for 2013, gross fixed capital formation is expected to still decline," the report notes.

Over five years into the crisis, the commission is still forced to note:

"The pick-up in equipment investment in 2014 is, however, expected to be subdued compared to past
recoveries as downside factors will continue being at play. These include the need for further
corporate balance sheet restructuring and still not normalised financing conditions in some member states."

Italy is very shaky ahead of difficult banking stress tests early next year, with an estimate of deeper economic contraction, from minus 1.3 per cent to minus 1.8 per cent, for 2013.

Growth is predicted to return at 0.7 per cent in 2014 but officials I talk to note that credit conditions remain difficult and the Italian banking sector looks vulnerable to shocks next year.

Incredibly (in the bad sense of the word), the commisison sees a turnaround in Italian investment, from fixed capital formation of minus -5.2 per cent in 2013 to plus 2.7 per cent next year.

Si, with all the uncertainty over Italian banks, the commission is estimating a 7.9 per cent pick up in Italian investment from 2013 to 2014. Incredible. As in, not credible.

Growth estimates for France have been downgraded from a 1.1 per cent estimate in the spring to 0.9 per cent. Spain, for which hopes had been high, saw its growth forecast slashed even further, down from 0.9 per cent to 0.5 per cent in the latest estimates.

The bad news means more austerity measures this winter as most of the eurozone’s big economies are on track to remain well over the EU’s increasingly nonsensical rule that annual budget deficits should not be over three per cent of GDP.

Spain, reeling from a recession locked in by the eurozone, has already been grudgingly granted two delays in its timetable to hit the target. But the new projections put the Spanish deficit on 5.9 per cent in 2014, rising to 6.6 per cent in 2015.

France, sworn to hit the three per cent level in two years, is instead forecast to be at 3.7 per cent in 2015. Italy’s gross government debt continues to rise, from an estimated 133 per cent of GDP in 2013 to 134 per cent in 2014.